The order book of listed defence shipyards is likely to swell over three times in the next two years, Antique Stock Broking said in its latest defence note, as it maintained its ‘Buy’ ratings on Mazagon Dock Shipbuilders Ltd and Garden Reach Shipbuilders & Engineers Ltd (GRSE) and suggested a ‘Hold rating on Cochin Shipyard Ltd.
Antique noted that the Next-Generation Corvettes (NGCs) are a planned class of eight anti-surface warfare corvettes for the Indian Navy, designed to be armed with antiship or land-attack missiles like BrahMos. The order value could be worth Rs 36,000 crore in this case, Antique said.
Lastly, P-17B frigates are expected to be more advanced than the P-17A class, with a more robust armament package. The order value could be Rs 70,000 crore based on its Acceptance of Necessity (AoN) grant.
“We continue to be positive on the Indian defence shipyards sector given strong order outlook, a robust policy framework favoring indigenization, and substantial government investment. The DAC has approved orders worth Rs 8.45 lakh crore over FY22–25, which is almost 3.3 times the same number for the preceding three years. We expect this to translate into significant order inflows in FY26–27 for defence shipyards” Antique said.
The brokerage has a target of Rs 3,433 on Mazagon Dock, Rs 1,481 for Cochin Shipyard and Rs 2,024 for GRSE
Defence stocks saw price correction from July 2024 to March 2025, but there has been a rebound since April, primarily triggered by the flare-up at India-Pakistan border and amid defence orders worth Rs 54,000 crore. The broader improvement in investor sentiment has further supported this recovery, Antique Stock Broking said.
“Given the long-term earnings potential in defence shipyards, we expect these stocks to likely trade up to 45 times FY27 core earnings. We continue to maintain our positive stance on Mazagon Dock and GRSE,” Antique Stock Broking said.
The brokerage said the stock price outlook for Cochin Shipyard is closely tied to the ordering of an aircraft carrier (IAC-II) on which there is lack of consensus over the urgency and size of the vessel, driving it to temper its stance on the stock.
Antique said the procurement pipeline for defence warships is substantial, though it is often subject to multi-year delays. Based on industry interactions, Antique said it has a fair degree of confidence and visibility on key big-ticket orders worth Rs 2,12,000 crore that are likely to be placed during FY26–27.
Overall, orders worth Rs 2,35,400 crore are lined up in FY26–27, which are 3.1 times combined order book of the three listed defence shipyards
Antique said the DAC has plans to place a repeat order for three Kalvari-class submarines with Mazagon Dock. The order will be on a nominated basis. The order value could be approximately Rs 36,000 crore and could get placed in FY26.
In addition, the P75I involves construction of six conventional submarines with AIP capabilities under the Strategic Partnership (SP) model. Unlike the P75 order, which was placed on Mazagon Dock on a nominated basis, the P75I order is based on competitive bidding. This order could be value at around Rs 70,000 crore at today’s prices.
